There’s an NBC News investigation — “Obama Administration knew millions could not keep their health insurance” — going around the internet right now. It made Reuters; that’s how I knew about it. (I don’t watch a lot of tv news.) The NBC claim is a little misleading, but it points out a genuine and serious problem with Obamacare — one I happen to be having.
The reason people can’t keep these plans is the coverage they offer is no longer legally sufficient. They have too many exclusions. The plans that will replace them are at least nominally superior; that should be good news. But the replacement plans are not necessarily cheaper.
When rewriting the policies, the insurance companies often took the opportunity to raise their rates; not surprising, because the policies must cover more conditions and sicker people. A subset of customers— like me — have found their new insurance will be considerably more expensive, because they either fall into the Medicaid expansion “hole” or find that the subsidies they do get from the healthcare.gov Exchange are not enough to make up for the increase in rates.
Let me explain my own position — it’s the one I know most about. I’m solidly middle class, and healthy, which means my situation is hardly representative of people having serious difficulty with the nightmarish American health care market, but does show that the health care law is having all kinds of problematic effects even for bourgeois folks who were supposed to find the law unambiguously helpful. As an electoral proposition, the Affordable Care Act was marketed by the Obama administration to people like me.
I don’t have a health plan through work, so a few years ago I bought an individual policy off the rack from Blue Cross. It’s not ghastly, but I don’t think it’s a very good policy — it has a high deductible. Of course, “high deductible” is a relative term these days; ten years ago this policy’s deductible would have seemed obscene, vertiginous, but now it’s normal. In fact, it turns out to be the near-equivalent of a policy Blue Cross is selling as a Gold plan on the Exchange.
The exact policy I have is going away because it has exclusions that are no longer allowed. So I need something new.
When the law passed, I was personally very pleased, because I stood to benefit a lot —I was going to be eligible for Medicaid. For anyone Medicaid-eligible, the law doesn’t offer a subsidy to purchase a policy from the Exchange. Why would it? Nobody thought of that. We’re meant to get our coverage for nothing. (Nothing, except the taxes we pay, of course.)
The Medicaid expansion was supposed to be mandatory for every state, but the Supreme Court decision that otherwise upheld the Affordable Care Act struck down that mandate. 15 Republican-led states went on to refuse the Medicaid expansion outright, 7 more probably will, and 5 more are considering alternate models that, even if they’re approved by HHS, won’t benefit as many people or benefit them as directly. Only 21 states have accepted the expansion of Medicaid outright (3 more might). That creates a gaping “hole” in which people newly eligible for expanded Medicaid (or people who were already eligible for Medicaid, but who have been unable to enroll because their states are broke and enrollment has been closed) actually get neither Medicaid nor subsidized insurance through the Exchange.
Because the sticker prices for individual policies are generally going up, Obamacare has done people in my situation a lot less than no good: to maintain coverage at the same level, we have to pay a lot more. My options are to buy a new individual policy off-the-rack from an insurance company, or to buy a policy through the Exchange at full sticker price. In both cases I’m looking at paying thousands more next year to maintain my high-deductible policy.
Of course, right now it’s academic. There are some steps in the enrollment process I can’t complete because the healthcare.gov site is still broken. The state I live in is one of those that does not have its own exchange, so the whole process has been on healthcare.gov, and — you know the story.
Pro tip: if you are going into the national Exchange, do not use the web site at all. Start and complete the process on the phone or with a human broker. Once you have started on the web site, you must finish on the web site; a second application will case “an issue”. I found that out when I called — it only took a minute to get in touch with a person. They just couldn’t do anything to help me. I’m stuck until the web site is repaired. Whether that will be in time to start coverage on Jan 1 is anyone’s guess; it’s been 30 days and the site still can’t perform the most basic functions.
I could just go uninsured and pay the $95 penalty. That number really tells the story. You can see the amazing disconnect of intention and reality by comparing the premiums, which will cost most people hundreds (if not thousands), with that small penalty.
I’ve considered some exotic options. Incredibly, after Obamacare, it may actually be cheaper for me to buy the least expensive policy that also offers prescription coverage, and to invest in a concierge doctor.
Of course, that’s already to say I’m very fortunate. Most people in my situation — and it’s tens of millions — will have to refuse coverage and get nothing but a poke in the eye, because they don’t have thousands to spend on premiums for a policy that will still require thousands more to pay in deductibles, copays, and coinsurance.
I could move to a state that didn’t refuse the Medicaid expansion. But pulling up stakes isn’t so easy. Internal exile wasn’t supposed to be the rational solution to the health care crisis.
This is just one story, in the genre of “unintended consequences”. I don’t advance it to elicit pity. To repeat, I’m still one of the lucky ones. I will have insurance. If I get sick, I will be able to get the treatment I need.
I offer it as a case study of how the the Affordable Care Act is actually working, on the ground.
The premise of the Exchange was to make group-like policies available to individuals who either didn’t have insurance or were struggling under premiums that were breaking them. For that goal, it has already failed millions.